Before you sign: What physicians should know about today’s health care deals

Physician practices have never had more options. Where the choice once came down to staying independent or joining the local hospital system, today’s landscape includes private equity–backed platforms, national management organizations, regional systems and payer-affiliated groups, all often competing for the same practices. Many buyers offer real advantages: stronger payer contracting leverage, upgraded technology, professional management support and access to capital. For physicians balancing the demands of running a business with caring for patients, these benefits can be genuinely appealing. However, today’s transactions are more complex than they used to be. An offer that looks compelling on a term sheet can feel quite different three years later if you didn’t fully understand the long-term structure. You don’t need to become a transaction lawyer, but you do need to ask the kinds of questions that sophisticated buyers expect from a thoughtful physician partner.

Why today’s deals are different

Several factors have changed the landscape of health care transactions.

First, more types of buyers are competing for physician practices. Hospital systems and large medical groups remain active, but they’re now joined by private equity–backed platforms, management services organizations and payer-affiliated groups. Each comes with its own playbook and investment horizon, directly affecting how they structure physician compensation and governance.

Second, the regulatory environment has evolved. Many states have adopted or expanded laws requiring notice or review of certain health care transactions. Several jurisdictions may give additional consideration to transactions, depending on the type of buyer. This simply reflects a broader focus on timing and transparency in certain deal structures.

Third, ownership structures have become more layered. Instead of selling directly to the hospital across town, you might be selling to a practice platform partnered with a management company and backed by an investment fund. Done well, this layering brings expertise and economies of scale — but it also means physicians should take time to understand how governance and decision-making work within the structure.

Five questions every physician should ask

1. What happens to my compensation after year one? Most offers lead with a purchase price and reassuring language about “no changes to your compensation model” during the first year or two. Thoughtful physicians will want to understand the full picture, including how compensation evolves as the partnership matures. Consider asking the buyer to illustrate your total compensation over a multiyear period. Request scenarios reflecting strong performance, steady state and softer conditions. Sophisticated buyers will have modeled these and should share them in plain language. If you can live with the range of outcomes, you’re likely aligned with the buyer’s expectations.
2. How are clinical decisions and staffing managed? Most physicians want to retain meaningful input on clinical decisions after a transaction, and experienced buyers understand this — strong clinical leadership drives quality and compliance. The key is ensuring that the governance structure supports effective collaboration between physician leaders and management. Seek clarity on how clinical and operational decisions are made: who sets clinic schedules and visit lengths, who determines staffing levels and how new services or locations are evaluated. Understanding whether physicians have formal governance roles — and how those roles interact with management — helps both sides build a productive working relationship.
3. How does this deal fit with state regulatory requirements? Your transaction exists within a specific legal environment. Some states maintain corporate practice of medicine rules and fee-splitting restrictions; others have added notice or review requirements for significant health care deals. You don’t need to master the statutes, but ask whether the deal triggers any state review process and what that means for timing. Ask whether this structure has been used successfully in your state. Experienced buyers will have clear answers — a good sign you’re partnering with a group that understands your regulatory environment.
4. What are my restrictive covenants, and how do I exit if necessary? Non-compete and nonsolicitation provisions rarely receive top billing in pitch materials, but they matter considerably if the relationship doesn’t unfold as hoped. These restrictions can be spread across multiple documents: your employment agreement, an equityholders’ agreement, a management agreement, etc. Pay attention to geographic scope and whether it tracks your actual practice area or the platform’s entire footprint. Consider duration, including whether the clock restarts if you change roles. Note limits on recruiting colleagues or consulting work. Many states are rethinking non-compete rules for physicians, and buyers are adjusting terms accordingly.
5. Who am I really partnering with, and what do they expect? Get clear on who is actually acquiring your practice. The logo on the letterhead is only part of the answer; the capital backing and strategy sit behind it. Ask about the ultimate owners, their investment horizon, and whether other physician groups are part of the same platform. Understand what financial reporting your practice will provide and how much growth is built into the plan. The best platforms are transparent about these expectations because they want physician partners who understand and are committed to executing the plan.

Practical steps before you sign

As you move from early conversations to serious negotiations, several practical steps can make a meaningful difference. Assemble your own advisory team early: a health care transaction lawyer, a tax adviser, and, when appropriate, a valuation adviser who works with physician practices. Ask for plain-language explanations of key terms. Examine your compensation over a five- to seven-year horizon, not just day one. Read every document containing restrictive covenants. Finally, talk openly with your partners to achieve internal alignment before making external commitments.

Choosing a partner, not just cashing out

Selling or affiliating your practice can make sense. Private equity–backed and other sophisticated buyers can be excellent partners when expectations are clear on both sides. They can bring capital, analytics, and professional management that support better care and more sustainable economics. For most physicians, however, this isn’t a classic “exit.” You’ll still be caring for the same patients, often in the same space, within a new organizational structure. The more you approach the transaction as choosing a long-term partner — rather than simply selecting the highest bid — the better your chances of ending up with a deal that works for you, your patients, and your new investors.

Matt Brohm is a partner in the healthcare and corporate and finance practice groups at Arnall Golden Gregory and co-chair of the firm’s healthcare private equity team